DTN Midday Livestock Comments 01/25 11:49
Cattle Futures Hold Moderate Gains At Midday
Moderate to strong buyer support quickly developed across the cattle futures
market Friday morning with some pre report positioning taking place in both the
live cattle and feeder cattle markets. Lean hog futures remain under moderate
By Rick Kment
Moderate to strong gains have developed through the morning across the
cattle complex as traders focus on the potential of market shifts following the
cattle on feed report which will be released Friday afternoon. Lean hog futures
remain moderately lower as lack of buyer support has allowed nearby contracts
to fade moderately lower at midday. Corn futures are trading lower at midday in
light trade. March corn futures are holding 3 cent losses at midday. Stock
markets are higher in light trade. The Dow Jones is 49 points higher while
Nasdaq is up 10 points.
Live cattle futures have fallen away from early session highs with traders
focusing on the lack of follow through support developing through the morning
as well as uncertainty about being able to stabilize beef cutout values through
the end of the month. February futures are still able to hold strong gains of
72 cents per cwt at midday, which may keep the market bullish through the end
of the week. In the absence of a widespread late day selloff in the front month
contract, the weekly close should close higher for the first time since the
middle of December. Cash cattle trade appears to be done for the week with
moderate trade developing in the South on Wednesday at lower prices, while
Northern trade was mixed as moderate to active trade quickly took place
Thursday. There appears to be a two-tiered system at the end of the week. This
is creating questions if the North and Southern trade will continue to be so
dynamically different in price strategy over the next few weeks. Beef cut-outs
at midday are lower, $0.01 lower per cwt (select) and down $0.41 per cwt
(choice) with light movement of 94 total loads reported (49 loads of choice
cuts, 24 loads of select cuts, nine loads of trimmings, 12 loads of ground
Even though placements of feeder cattle are expected to see a moderate bump
in the afternoon release of the cattle on feed report the futures market
continues to hold moderate gains based on lack of firmness in the corn
contracts and renewed buyer activity developing in the live cattle contracts.
Nearby contracts are holding light gains, with very little additional interest
or widespread price support is likely to develop before closing bell.
The light early pressure which developed Friday morning in the lean hog
futures market has slowly continued to develop with nearby contracts posting 30
to 70 cent losses despite the lack of active trade. The pressure in cash values
and inability of outside markets to hang onto early buyer support, has created
additional softness through nearby lean hog contracts. Cash prices are lower in
light trade on the Iowa/Minnesota morning cash hog report. The weighted average
price fell $1.17 per cwt to $86.49 per cwt with the range from $79.00 to $89.50
per cwt on 945 head reported sold. Fresh pork trade posted 10 loads of fresh
pork selling on the midday pork carlot report. Lean hog index for 1/23 is at
$87.78 up 0.78 with a projected two-day index of $88.28 up 0.50.
The 14-to-16-pound belly markets are unreported on the midday carlot report.
Rick Kment can be reached at firstname.lastname@example.org
Copyright 2013 DTN/The Progressive Farmer. All rights reserved.
View All Market Commentary
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.